Individual Voluntary Arrangement Negotiated Settlement

Individual Voluntary Arrangement

We were approached by an individual at the suggestion of his business advisor. He had creditors totalling £160.000 which had arisen over a period of time funding his lifestyle and taking on family debts following a family bereavement.

He owned a number of investment properties all of which were tenanted. We managed to negotiate with his creditors that over a period of time they would receive approximately 27 pence in the £ from future earnings and rental income. Under the terms of the arrangement following completion the rental properties would revert back to him along with his marital home.

In the event that the arrangement had not been approved, it is likely that creditors would have received a much lower dividend and the rental properties would in all likelihood have been repossessed.

Negotiated settlement

The debtor was referred to us by his accountant. He had surplus income and wanted to invest in other business opportunities. He entered into a business arrangement to purchase a particular overseas asset on finance for business purposes. However, he failed to register for VAT in the appropriate locality.

The debtor subsequently discovered that there had been a massive decline in the new line of business and income was extremely limited. In addition HMRC deemed that the asset was not a business asset and refused to repay the VAT paid on its purchase.

At the same time the debtor’s core business began to struggle and he had no surplus funds to support the repayments on the loan. The finance company repossessed the asset and sold it leaving a significant shortfall.

We were able to negotiate a settlement of 25p in the £ with the finance company to satisfy the debt without the need to enter into bankruptcy proceedings which would have affected other business interests.